Nasdaq May Offer a Cryptocurrency Exchange, But Is Cautious of ICOs

Nasdaq announced that it may develop a cryptocurrency exchange. However, it expressed caution about ICOs, a fundraising method prone to fraud.

Nasdaq, the world's largest stock exchange, is on its way to providing a cryptocurrency exchange for investors. Currently, most cryptocurrency exchanges are solely used to trade digital assets, with limited handling of other currencies and assets. Nasdaq, meanwhile, already serves as an exchange for stocks and foreign currencies. If Nasdaq introduces a cryptocurrency exchange, it would be a meeting of two financial realms on a scale not yet seen.

In an interview with CNBC, Nasdaq CEO Adena Friedman showed an interest in offering a cryptocurrency exchange and affirmed that cryptocurrencies are on their way to becoming a lasting financial asset. Friedman was more cautious about ICOs, which she wants to see successfully regulated as securities. ICOs, in which new and emerging cryptocurrencies are offered at low rates before going live, have been notoriously associated with fraud and exit scams.

Whereas established cryptocurrencies have somewhat intrinsic value and can readily be exchanged, ICO tokens have only potential value and can only be traded on secondary markets until a product launches. "These are key hallmarks of a security and a securities offering," according to the U.S. Securities and Exchange Commission.

If and when Nasdaq offers a cryptocurrency exchange, it will serve as a further advance of cryptocurrencies into mainstream consciousness, meaning that cryptocurrencies will be more widely used and trusted by new participants and buyers. And Nasdaq isn't alone: the Toronto Stock Exchange recently announced plans to build a cryptocurrency brokerage. Meanwhile, some cryptocurrency advocates, who value the anonymity and freedom that cryptocurrencies are designed to support, oppose the increasing regulations enforced by traditional exchanges.

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

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